All HIPAA-covered health organizations, and especially insurers, have been handed a small victory in the war of administrative simplification, as federal regulators once again back off a policy change long in the making.

The Department of Health and Human Services is delaying enforcement, until further notice, of health plan enumeration and the unique health plan identifier system, regulations stemming from the Health Insurance Portability and Accountability Act that were finalized in the fall of 2012 and set to take effect in the coming years.

The agency’s decision comes after an HHS advisory board, the National Committee on Vital and Health Statistics, recommended not requiring a new ID system in administrative transactions.

In September, the NCHVS told the agency it should “rectify in rulemaking that all covered entities not use the HPID in the HIPAA transactions,” over concerns of the operating standard’s costs and benefits among healthcare payers, providers and HIPAA-covered technology purveyors.

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A payer identification system developed by the National Association of Insurance Commissioners “is now widely used and integrated into all provider, payer and clearinghouse systems,” wrote Larry Green, MD, chair of the National Committee on Vital and Health Statistics and a family medicine professor at the University of Colorado in Denver.

Already, the NAIC’s ID system “is the basis for routing day-to-day administrative transactions from a provider to the appropriate payer, and modifying it would create a significant disruption in the routing and processing of all administrative transactions,” Green and the NCHVS board wrote. The NAIC’s ID is also used by the Centers for Medicare & Medicaid Services for oversight of health insurance exchange plans, they noted.

The CMS Office of e-Health Standards and Services, the overseer of healthcare standard transactions, code sets, unique identifiers and operating rules, said its new policy of enforcement discretion “will allow HHS to review the NCVHS’s recommendation and consider any appropriate next steps.”

The delay and probable withdrawal of the HPID requirements is sure to come as a great relief to health organizations trying to simplify, digitize and automate administration and payments.

As for another operating standard, though, health organizations largely remain committed, along with HHS, if not Congress.

At NCHVS hearings this summer, industry stakeholders “were consistent in their message that another delay in implementing ICD-10 would add to the already substantial costs of delays arising from stopping and re-starting processes and re-education and training of staff,” Green and committee members wrote.

“HHS and industry leaders,” they urged, “should proactively emphasize to Congress the merits of ICD-10, progress made by the healthcare industry in its readiness to implement ICD-10, and, costs to the healthcare industry associated with any further delay.”

See also:

Case studies in administrative simplification

The long but steady road toward Administrative Simplification progress